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10 Ag Policy Issues to Watch in 2014

01/03/2014

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With 2013 in the books and the holiday season behind us, its time to prepare for the challenges that face us in the coming year. While I am no expert on forecasting long-range weather patterns, commodity market fluctuations, or predicting the future of the Kardashian family, I do feel adequately qualified to indulge in a few predictions regarding what will be hot topics in the agricultural policy realm in the coming year. Accordingly, I, like most writers with access to an audience, have prepared a top 10 list of things to watch in agriculture in 2014.

1. The 20122013 2014 Farm Bill

Farm Bills are getting harder and harder to come by these days. The 2012 effort to pass a Farm Bill failed. Congress punted by granting a one-year extension. The 2013 effort has been a struggle that will spill over into 2014. In particular, the fight over how far to cut SNAP benefits has put Democrats and Republicans at loggerheads. Based on the latest developments, we can expect to see one some time in January. However, the specifics of the Farm Bill remain to be seen because the legislation is being worked out behind the scenes by committee leaders and their staff.

2. The Chesapeake Bay TMDL

The Chesapeake Bay is entering its third year under the restrictions imposed by the Chesapeake Bay TMDL. Under the TMDL plan, EPA is requiring the states in the watershed to make significant annual progress in reducing nitrogen, phosphorus and sediment pollution. Agriculture bears a significant portion of this burden. Achieving water quality goals in a watershed as large as the Chesapeake Bay through a single plan is a clunky process. It’s also questionable as to whether EPA has the authority to impose such a plan. American Farm Bureau Federation challenged EPA’s authority to mandate the TMDL as it did. Farm Bureau lost at the district court level, but it has appealed the case to the Third Circuit Court of Appeals. We will likely get a decision from the appeals court some time this year. The outcome of this litigation will determine how EPA approaches watershed restoration in not only the Chesapeake Bay, but other large watersheds.

3. Mississippi River Basin Numeric Limitations on Nutrients

The Chesapeake Bay TMDL was supposed to be EPA’s case study in approaching large scale watershed restoration efforts. EPA’s plan was to take the lessons that it learned from the Bay TMDL and apply it to other watersheds across the country, with the Mississippi River being the ultimate goal. However, some environmental groups were impatient with EPA’s approach. They petitioned EPA to develop numeric limitations for nitrogen and phosphorus for all waters in the Mississippi River Basin. When EPA denied this petition, the environmental groups took them to court. A federal court held that EPA has to respond to the petition and determine whether numeric nutrient limitations are appropriate for the Mississippi River Basin. EPA has appealed this decision to the Fifth Circuit Court of Appeals. We can expect a decision on this case in the coming year.

4. Mandatory Country of Origin Labeling

The new COOL “born, raised, and slaughtered” regulations became effective on November 23, 2013. The battle to overturn these regulations, which are intended to protect American swine and cattle producers from foreign competition, is waging on three fronts – Capitol Hill, the federal courts, and the WTO.

mCOOL supporters and opponents have been working the Farm Bill conferees to ensure that their interests are protected on the legislative front. We will likely know what the Farm Bill looks like in the next month.

The major livestock and meatpacking trade associations have challenged mCOOL in the federal courts. The mCOOL supporters, including USDA, R-CALF and HSUS, prevailed on the first round of litigation. mCOOL opponents have appealed this decision. The appeal will be heard in the D.C. Circuit on January 9th. We can expect a decision sometime in the next few months on this matter.

Canada and Mexico have also challenged the new mCOOL regulations at the WTO because mCOOL provides an incentive to discriminate against Mexican and Canadian livestock. The WTO has assigned their challenge to the same panel that rejected earlier mCOOL provisions that were less discriminatory against foreign livestock. The wheels turn slow at the WTO, but we can expect to hear at least an initial decision on the matter before the end of the year.

5. Lawyers, Dust and Feathers – the Alt case

One of the major cases decided this year was Alt v. EPA. In Alt, EPA alleged that a poultry farmer needed a NPDES permit on the basis that the farm was discharging pollutants when stormwater washed dust, feathers and litter away from the barnyard area. Under this theory, nearly every CAFO would be required to obtain a NPDES permit, a costly and onerous process. A federal judge held that the farm was not required to obtain a NPDES permit because runoff from the barnyard area is an agricultural stormwater discharge that is exempt from permitting requirements under the Clean Water Act. While this decision is a major victory for animal agriculture, it’s not quite time to uncork the champagne. EPA and the environmental groups that intervened in the suit have decided to appeal this case. Arguments will take place later this year and we can expect a decision towards the end of 2014 or the beginning of 2015.

6. FSMA Rollout

FDA is under the gun, or actually a court order, to write the rules that implement the Food Safety Modernization Act of 2011. FDA has to propose, accept public comment on, and finalize several major regulations pursuant to FSMA by June 30, 2015. This is a major strain on FDA’s resources and some of the rules that have been proposed reflect the rushed state that the Agency is operating under. While these rules will not be finalized until 2015, FDA is accepting public comments on their various proposals through the early months of 2014. We can expect that the new FSMA rules will have a substantial impact on various segments of the ag sector, especially produce farms and feed manufacturers.

7. GMO Labeling

Whether food manufacturers should be required to label their products that include genetically engineered ingredients has been a hot button issue for the past few years. Supporters of mandatory labeling have hit several roadblocks at the federal level, so they have turned to state governments to require labeling. While high-profile ballot initiatives in California and Washington state have failed, supporters have made inroads with some measures in the northeastern states. For instance, Maine and Connecticut have labeling measures in place, but they only become effective if a critical mass of other states require GMO labeling. In order to avoid a patchwork of various state labeling laws, we may see efforts ramp up in 2014 to pass some type of law regarding GMO labeling at the federal level, which would preempt state labeling laws.

8. The Renewable Fuels Standard

The fight over the Renewable Fuels Standard will likely come to a head this year. Much of the political support for the policy has dwindled in the face of opposition from a growing number of strange bedfellows including environmentalists, livestock producers, and the oil industry. With petroleum consumption decreasing, the RFS mandate for renewable fuel use is hitting the “blend wall” much sooner than was anticipated when the legislation was drafted in 2007. In response to the blend wall concerns, EPA has proposed lowering the targets for corn ethanol use in 2014. Opponents of the RFS believe this is a step in the right direction, but not far enough. Meanwhile, supporters believe this is a step down a slippery slope. We can expect 2014 to bring us legislative proposals to gut the corn ethanol portion of the RFS. We can also expect RFS supporters to sue EPA if it finalizes its proposal to reduce the corn ethanol mandate.

9. Trade Agreements

The Obama Administration is currently negotiating two major trade agreements that could have a major long-term effect on agricultural trade. The Trans-Pacific Partnership could significantly improve our access to export markets in the Asia-Pacific region. However, agriculture is a major sticking point in these negotiations. Japan, in particular, wants to protect much of its agricultural industry from foreign competition. If this is allowed, then other countries to the agreement will likely seek similar protections, making the TPA a much weaker deal for US agriculture. We will likely see some progress on this matter in the coming year.

The second major trade agreement under negotiation is the Transatlantic Trade and Investment Partnership (TTIP). This is a proposed trade agreement between the US and the European Union. While this trade agreement could be the biggest trade deal in the world, agriculture could be a major sticking point in the negotiations. Conflicts over GMO acceptance in some of the EU member countries, the use of hormones for growth promotion, and animal welfare practices could be roadblocks for increasing trade with the EU. The TTIP negotiations have not progressed as far as TPA, so we can expect developments in TPA to influence the outcome in TTIP.

10. Immigration Reform

The story for immigration reform in 2014 will likely be a disappointment. While it seemed possible that some type of bipartisan immigration reform deal could have emerged in early 2013, that window has likely closed. The mid-term elections will be looming over Congress and its unlikely that enough members will be motivated to take what could be a risky stand on immigration issues so close to election day. While the Republican Party continues to take a pounding on a national level for failure to catch up to the electorate’s view on immigration reform, many of the individual members of the House are from districts where any appearance of granting amnesty is a political non-starter. In the meantime, millions of undocumented workers must remain in the shadows and farmers and ranchers that depend on immigrants for labor will face the same uncertainty and labor shortfalls that they have experienced the last few years.

John Dillard is an attorney with Olsson Frank Weeda Terman Matz P.C. (OFW Law), a Washington, DC-based firm that serves agricultural clients and clients with issues before federal and state courts, EPA, FDA, USDA, and OSHA. John focuses his practice on agricultural and environmental law. He occasionally tweets at @DCAgLawyer. This column is not a substitute for legal advice.

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